Tuesday, December 16, 2014

DOT lets Southwest Airlines keep Kansas City-Washington, D.C. route

The U.S. Department of Transportation has ruled that Southwest Airlines may keep flying the route between Kansas City and Washington Reagan National Airport that it received on a temporary basis since Feb. 1.The pair of slots for one takeoff and one landing at the restricted Washington airport became available when Republic Airways informed the DOT on Jan. 24 that its Frontier Airlines unit would drop the KC-DC route. (Republic was selling Frontier.)On an emergency basis, DOT gave the slots to Southwest to keep flying the route, and launched a proceeding to decide how best to use the slots at Washington Reagan.Southwest applied to keep flying the Kansas City route. JetBlue Airways offered a Jacksonville, Fla., flight. American Airlines proposed an Islip, N.Y. (Long Island) route. New carrier People Express wanted to fly from Myrtle Beach, S.C., for half the year and West Palm Beach, Fla., the other half.The DOT said People Express wasn’t eligible because it wasn’t approved yet for commercial service.For American, the DOT said: “While at the time of its application, American provided service between DCA [Washington] and ISP [Islip], it recently terminated this service in July, 2014. The other communities in question, Kansas City and Jacksonville, both have existing service to DCA from American.”It concluded that Southwest and JetBlue would both offer low-fare service, while American would not. In addition, American planned to use 50-seat regional jets while Southwest and JetBlue planned to use larger airplanes. It noted that Southwest proposed using airplanes with 43 more seats than JetBlue’s 100-seat Embraer.Here’s the meat of the DOT deliberations (JAX is Jacksonville, DCA is Washington, MCI is Kansas City):

Given the constrained nature of operations at DCA, we find that Southwest would use the limited resources that are these slot exemptions more efficiently.

Moreover, Kansas City is a much larger market than Jacksonville, providing for a larger pool of potential passengers. According to the U.S. Census Bureau, the Kansas City Metropolitan Statistical Area (MSA) is home to 2,054,473 people, while Jacksonville is home to 1,394,624 people.

When examining current schedules, we also found that there is less nonstop air service between DCA and Kansas City than between DCA and Jacksonville, even though Kansas City is the larger market. The DCA-MCI market has 1,432 weekly nonstop seats while the DCA-JAX market has 2,201 weekly nonstop seats.

MCI also offers more online connecting opportunities for passengers than does JAX. According to September, 2014 published schedules, the only connecting service offered by JetBlue at JAX is to San Juan, Puerto Rico, which JetBlue already serves directly from DCA. On the other hand, Southwest offers connecting service from MCI to at least ten beyond destinations, including Denver, Phoenix, Los Angeles, Seattle, and others.

While JetBlue’s application has merit, we find that Southwest’s application will likely produce greater consumer benefits for a larger pool of passengers in a market with less DCA service than would JetBlue’s Jacksonville service. The proposals from both Southwest and JetBlue would bring competition to their respective proposed markets, but we conclude that the maximum competitive benefits will be realized by the award of these two slot exemptions to Southwest for service to MCI.

UPDATESouthwest spokesman Brad Hawkins thanked the Kansas City community and congressional delegation for their strong support for the application.“This decision is validation of the value both in terms of community service and economic development, and the value of Southwest serving this air market,” Hawkins said.Hawkins said the route has had “very high load factors,” with both strong traffic between Kansas City and the Washington area, as well as passengers using Kansas City to catch other flights to and from the West.Southwest entered the Kansas City market in Feb. 18, 1982. It was the 20th airport served by Southwest, its first Midwest destination, Southwest’s ninth non-Texas city and the fourth that could not be served out of Dallas Love Field (because of the Wright amendment).Southwest currently offers 69 daily departures to 24 cities out of Kansas City.